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1997 DIGILAW 1024 (RAJ)

SUBASH CHAND JAIN v. SBBJ

1997-08-26

GYAN SUDHA MISRA

body1997
Judgment GYAN SUDHA MISRA, J. ( 1 ) THIS writ petition challenges the order dated 13-3-1997 passed by the Debt Recovery Tribunal, Jaipur in case No. 52/1994 by which the written statements/replies filed by the petitioners after the transfer of the suit to the Tribunal under the provisions of the Recovery of Debt Due to Banks and Financial Institutions Act, 1993 has been ordered to be returned to the petitioner on the ground that the petitioner had already filed reply in the suit prior to its transfer from the Court of District Judge to the Debt (Tribunal ). ( 2 ) IN order to test the correctness of the order impugned, a slight enumeration of the facts and circumstances of the case are as follows :- ( 3 ) THE State Bank of Bikaner and Jaipur, impleaded as respondent herein, filed a civil suit for recovery of an amount of Rupees Twenty Eight lakhs, in the Court of Addl. District Judge, Kishagarhbas, Alwar against M/s. India Electronics Ltd. including the petitioners herein who were impleaded as defendants Nos. 2 and 4 respectively as they stood guarantors for the debtors - M/s. Indian Electronics. The defendants/ petitioners appeared before the Court of Addl. District Judge and in order to contest the suit, filed their written statements but the suit had been subsequently dismissed ex parte against some other (defendants Nos. 3 and 5 (who are not petitioners herein)) and, hence, they had filed an application for setting aside the ex parte proceedings against them. While the suit was pending, the Recovery of Debt Due to Banks and Financial Institutions Act, 1993 (shortly referred to as the Act of 1993) came into force, due to which the suit was transferred to the Debt Recovery Tribunal, which is empowered to deal with such suits for recovery either from the stage it reached before such transfer or from any earlier stage or de novo, as the Tribunal may deem fit. The relevant provision of the Act of 1993, in this regard envisages as follows :-"where any suit or other proceedings stands transferred from any court to a Tribunal under sub-section (1) (a) the court shall, as soon as may be after such transfer, forward the records of such suit or other proceedings to the Tribunal and (b) the Tribunal may, on receipt of such records, proceed to deal with such suit or other proceedings, so far as may be, in the same manner as in the case of an application made under Section 19 from the stage which was reached before such transfer or from any earlier stage or de-novo as the Tribunal may deem fit. " ( 4 ) UPON transfer of the present suit, the Tribunal issued summons under Sec. 19 (3) of the Act of 1993 along with a copy of the entire paper book, documents and affidavits to all the defendants requiring them to submit their reply within 30 days of the service of summons, which were also served on the petitioner. The petitioners, in response to the notice, submitted their respective reply on 10-5-1996 and 16-8-1996, which were taken on record and the matter proceeded further on the basis of the reply filed by the petitioner. The petitioners also filed an application thereafter for cross-examining the witnesses produced by the plaintiff-bank through affidavit, which it had filed in evidence before issuing of the summons to the defendants petitioners under Sec. 19 (3 ). Thereafter although the arguments were heard on this application and the matter was posted for orders on 6-2-1997, the Honble Member of the Tribunal refrained from passing any order on the application and posed a query as to whether the petitioners were entitled to file their written statement for the second time after the transfer of the suit from the Court of Addl. District Judge, Kishangarhbas to the Tribunal. The petitioners emphatically submitted before the Tribunal, that on transfer of cases, the defendants were fully competent to file their replies before the Tribunal as the Tribunal although did not pass any specific order, under Sec. 31 (12) (b) of the Act as to the stage from which the matter was to be dealt with, but from the various orders and subsequent proceedings of the Tribunal, it could safely be inferred that the Tribunal had initiated de novo proceedings in the matter. But contrary to the inference drawn, the Tribunl on 13-3-1997, passed an order refusing to take the written statement filed by the petitioners on record and, ordered for returning it back to the defendant-petitioner stating that it was received earlier by mistake. The said order is, now, under challenge in this writ petition. ( 5 ) ASSAILING the order of the Debt Recovery Tribunal, it has been submitted that the Tribunal has palpably erred while passing the impugned order holding therein that it did not pass any order for de novo proceedings in the matter, due to which it refused to take the written statement of the petitioner defendant on record. Attention of this Court had been invited to Sec. 31 of the Act in this regard and replying on the same it had been submitted that the Tribunal while passing the impugned order wrongly held that the summons under Sec. 19 (3) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 was issued by mistake, for any such inference of mistake could have been made by the Tribunal only for cogent reasons, which is completely absent in the present case. Thus, the argument in sum and substance is that the rejection of the petitioners written statement after transfer of the suit from the court of the District Judge to the Tribunal is clearly a prejudicial order and is fit to be quashed and set aside by this Court. ( 6 ) LEARNED counsel for the respondents-Bank, however, has supported the order of the Debt Recovery Appellate Tribunal and has sought to justify it by contending that the discretion exercised by the Tribunal to try the case from the stage in which the matter was received by the Tribunal is wholly judicious and proper in the facts and circumstances of the case and hence it was justified in refusing to accept the written statements/replies filed by the defendants/respondents after transfer of the suit to the Tribunal. ( 7 ) ON a critical appreciation of the arguments and counter arguments advanced by learned counsel for the parties, in support of their respective cases, in the light of Sec. 31 of the Act, it clearly transpires that although, the Tribunal after the transfer of the suit from the District Court to the Tribunal and on receipt of such report, is competent to proceed and deal with such suit or other proceedings in the same manner as in the case of an application under Sec. 19 from the stage which was reached before such transfer, or from any earlier stage, or de novo as the Tribunal may deem fit, the primary duty of the Tribunal, in such case, while taking a decision upon such matter is to assess the prejudice that may be caused to the parties in such circumstances. This prejudice, although, not expressly laid down in Sec. 31, the principle is inherent in the section and the same can be judged by the Tribunal upon the facts and no blanket order without application of mind should have been passed merely on the ground of technicalities, for it is ultimately the cause of justice which has to be served in the process. In the instant case, it was very much open for the Tribunal to examine as to whether the petitioners by filing a written statement has resiled from their earlier written statement, or has brought in new facts which changes the character of the suit or it has not been filed in good faith. It is a well established principle as enumerated under Order VI Rule 17 of the Code of Civil Procedure that any amendment sought by the defendant which changes the complex and character of the suit brought shall be disallowed and in my opinion, the same principle should have been applied by the Tribunal in the circumstances of this nature while accepting or refusing to accept a fresh written statement filed by the defendant-petitioners after transfer of the suit from the court of the District Judge to the Tribunal. It is no doubt true that the proceeding before the Tribunal is in the nature of summary proceeding but when such suits require trial, the basic principles of civil law which is laid down while dealing with amendments in pleadings will have to be applied in the circumstances of this nature in the interest of justice and to arrive at the truth for "all rules of court" as observed way back in the year 1921 by their Lordships of the Privy Council in Ma Shive Mya v. Moung Mr Hnoung vide 48 Ind App 214, 216-217 : (AIR 1949 PC 249) and thereafter the principles reiterated in several subsequent decisions "are nothing but provisions intended to secure the proper administration of justice, and it is, therefore, essential that they should be made to serve and be subordinate to that purpose. " ( 8 ) IN the case at hand, though, the Tribunal has passed a reasoned order while rejecting the second written statement filed by the defendant-petitioner, it has failed to throw any light on the question as to whether the second written statement filed by the petitioners changed the character of the suit in any manner and in what manner the plaintiffs case would be prejudiced. The primary duty and consideration for the Tribunal in my opinion in a situation of this nature should have been to assess as to whether any prejudice would be suffered by the plaintiff- respondent by entertaining the second written statement filed on behalf of the respondents once it was accepted by the Tribunal, as the section itself lays down while incorporating the words "may deem fit" in the opinion of the Tribunal. The impugned order is completely silent on the question of prejudice that may or may not have been caused to the plaintiff respondent while entertaining the second written statement especially when the suit had earlier been dismissed against defendants Nos. 4 and 5 and the ex parte decree had been set aside. The order of the Tribunal, thus, is wholly silent on this count and it has further failed to take into account, that assuming the second written statement was accepted, it was always available to the plaintiff to challenge it and take advantage of the situation in case the subsequent reply ran counter to the earlier written statement filed by the defendant petitioners. In totality, therefore what is important is that the Tribunal while refusing to accept the written statement filed on behalf of the petitioner/defendant should not have rejected it without assigning any reason especially when it was vested with the discretion to try the suit from whatever stage it thought proper, was appropriate and in the interest of justice. But the Tribunal has proceeded purely in a mechanical manner without caring to assign any reason for refusing to accept the written statement, although it has accepted it earlier. Perhaps this court would have been able to appreciate the Tribunals order in case, it has enumerated the prejudice that could be caused to the plaintiff/respondents case in the event of acceptance of subsequent written statement or it had been assigned any reason that the subsequent written statement after transfer of the suit, was not in good faith. But the order, as already stated, is silent on these aspects of the matter and, hence the same does not deserve to be upheld by this Court. It is therefore, set aside and the Tribunal is, directed to accept the written statement filed by the defendant-petitioner and proceed further in the matter according to law. However, it is made clear that any cross-examination of the witnesses which may have taken place earlier, will not be treated as a nullity and in case any supplementary evidence is required to be filed, by the plaintiff/bank in view of the subsequent written statement of the defendant/petitioners, it may be allowed to be filed expeditiously. ( 9 ) THE writ petition is accordingly allowed, but in the circumstances without cost. Petition allowed.